Resources Use and Efficiency of Artisanal Fishing in Oguta, Imo State, Nigeria

Full Length Research Paper

Resources use and efficiency of artisanal fishing in Oguta, Imo State, Nigeria

A. Anene1*, C. I. Ezeh2, and C. O. Oputa2

1Department of Animal Science and Fisheries, Abia State University, Umuahia, Campus, P. M. B. 7010, Umuahia, Abia State, Nigeria. 2Department of Agricultural Economics and Extension, Abia State University, Umuahia Campus, P. M. B. 7010, Umuahia, Abia State, Nigeria.

Accepted 18 November 2009

This study determined the cost-returns and the efficiency of resources used in artisanal fishing by fishers in Oguta Local Government Area of Imo State Nigeria. Data used for the study was obtained from primary and secondary sources using a multi-stage random sampling technique. In the first stage, 10 villages out of the 27 villages in Oguta were selected at random. In the second stage, 4 fishers were selected from each of the villages making a total of 40 respondents in Oguta Ameshi. Similarly, 60 respondents were selected from Ubi, which is made up of 27 farm settlements (Egwes). This brought the total sample size to 100. The result showed that the total revenue was N354, 530.00 with a total variable cost of N160, 677.23. The gross margin realized was N193, 852.77 with a net profit of N161,444.52. The study shows that the revenue from artisanal fishing was best estimated using the linear functions, which explained 51.5% of the total variations. The research identified that artisanal fishing is profitable and all the factors employed were inefficiently utilized. This suggests that higher profit and yields could be attained by efficient allocation of the employed resources which is vital to the sustainability of fishing in Nigeria.

Key words: Resource use, efficiency, fishers.

INTRODUCTION

Fish production in Nigeria is either by capture fishers, tional reforms and the various fiscal and economic artisanal fish farming (fish farming) or by import. Capture measures. Some of these measures involved tax exemp- fisheries involve the harvesting of naturally existing tion and input subsidy schemes for distribution to fishers stocks of wild fish. This can be done either by small to increase production. Despite all these forms of external scale/artisanal fishers or by industrial/commercial intervention in the development plans, the fisheries sector trawlers. In artisanal fisheries, production is achieved by still showed a deficit in the supply and demand of fish to individual or by small groups by the use of labour Nigerians. The productivity of these fishers are being intensive gears. Characteristically artisanal fishers hampered by a litany of problems amongst which are, operate from dug out, wooden canoes that are more relative high cost of fishing gears, use of dangerous che- often than not unmotorized (Coates, 2000). micals to kill fish, manpower shortage in the key areas, At present, fish production by artisanal fishers under capacity utilization, inadequate and faulty planning dominates fish production in Nigeria. Between 1994 and with attendant short lived policies by government, lack of 1998, the contribution of this sector to fish production finance, lack of storage facilities and marketing problems ranged between 36 – 47% (Federal Office of Statistics, (Olayinde, 1976). 1999). Several attempts were made over the years to Despite the significant contribution of artisanal fishers boost the productivity of artisanal fishers through institu- to local fish production in Nigeria, there are a few economic studies or financial analysis on the artisanal fisheries sub-sector of the Nigerian economy. For a meaningful development policy in artisanal fisheries in Nigeria, *Corresponding author. E-mail: [email protected]. Tel: information is required on the allocation and utilization of 234-8037107726. all the resources or the resource use efficiency in addition

Anene et al. 095

to other economic data. This study is therefore generally The production response function model was expressed implicitly aimed at determining the cost and returns of artisanal according to Oladunni (1996) and Mbanasor and Obioha (2003) fishing and the efficiency of resources used in artisanal thus: fishing. Y = f (x1 , x2 , x3 , x4 , x5 , x6 ,e)

METHODOLOGY Where;

Study area Y = Value of output in Naria

x1 = Fixed costs invested (N) The study was conducted in Oguta Ameshi and Ubi Oguta in Oguta Local Government Area of Imo State. Oguta is bounded between x2 = Value of variable costs (N) longitude 6° 41’ – 6°50’ East and latitude 5°41’ – 5°44’ North of the equator. Oguta land mass is approximately 2,025.75 km2 x3 = Labour (Man days) (Nwadiaro, 1989). Depreciation value of assets (N) This land mass is distributed as follows: x4 = x = Area of lake fished (Ha) 1. Ameshi town: 63.75 km2 5 2 2. Ose-motor: 46.50 km x6 = Value of other inputs (N) 3. K Beach: 30.50 km2 2 Error term 4. Ubi (Farmlands): 1885.99 km e =

This region is located within the equatorial rain forest belt with an The following functional forms were evaluated average annual rainfall of 3,100 mm. Oguta is bounded on the north by Ogwu-Aniocha in Anambra State. It shares its northeastern (a) Linear function border with Egbuoma, Mgbidi and Egwe in Imo State. On the south Y = b + b x + b x + ...... b x + ei to the eastern flank, Oguta is limited at approximately latitudes 0 1 1 2 2 6 6 50381 to 50391 northwestern and southeastern boundaries of Oguta are defined by the Niger, from upstream of Okpai to beyond Abo, Here: Marginal Physical Production (MPP) Kwale and Umuoru (River Niger) (Nwadiaro, 1989). MPP = b (regression coefficients) Elasticity = bi x y

Sample selection (b) Semi–log function

Multi-stage random sampling technique was used in this study. Y = log b + b log x + b 2 log x + ..... b log x + ei First, 10 villages out of the 27 villages in Oguta were selected at 0 1 1 2 6 6 random. In the second stage, 4 fishers were selected from each of the villages making a total of 40 respondents in Oguta Ameshi. In this, MPP = b x Similarly, 60 respondents were selected from Ubi, which is made up of 27 farm settlements (Egwes) (Nwadiaro, 1989). This brought the Elasticity = b y total to 100 respondents. The reason for the 60/40 by proportion of the respondents is due to the fact that there are more artisanal (c) The Cobb Douglas (double log) function fishers in Ubi than Oguta Ameshi, (Nwadiaro, 1989). The sample frame for each of the villages (Oguta Ameshi) and Egwes (Ubi) Log Y = logb + b log x + b log x ...b log x + ei were supplied by the Chiefs (Okparas) of all the 10 villages in each 0 1 1 2 2 6 6 case. The various analysis carried not include the use of means, gross, margin analysis, frequency counts and multiple regressions. Here: MPP = b. y x The gross margin analysis and Net profit were used as specified below: Elasticity = b In all bi = b6 are the regressions coefficients

n n ’ The marginal value product (MVP) was used to determine the GM = ρ Q − P x ÷ productivity of the resources which the ratio of MVP to the marginal ƒ i i ƒ j j ÷ factor cost (MFC) was used to determine efficiency use. MFC was i=1 j=1 ◊ either the purchased unit price of the input or the opportunity cost. Six percent interest rate was used to obtain the opportunity cost of Where; fixed assets and other production inputs i.e. for every one Naira GM = gross margin spent in artisanal fishing was therefore N1.06. Labour and water were valued at their current market price. However, MPP is taken Unit price of output Pi = as the MVP since

Qi = Quantity of each output Log Y = logb + b log x + b log x log+ b log x + b log x P = Unit price of each input 0 1 1 2 2 3 3 4 4 j (d) Exponential function xi = Quantity of each output

Net returns = GM-TFC TFC=Total fixed costs derived by depreciating fixed assets ln Y = b0 + b1 x1 + b2 x2 + b3 x3 + b4 x4 + b5 x5 + b6 x6 .

096 J. Dev. Agric. Econ.

Table 1. Cost and returns of artisanal fishing in Oguta Local Government Area, Imo State, Nigeria.

Items Quantity (kg) Price (N)/kg Total (N) A: Revenue Sales of fishes 500.75 440.0 220,330.00 Quantity consumed 150.00 - 66,000.00 Quantity given as gift 100.00 - 44,000.00 Quantity processed and stored 55.00 - 24,200.00 Total 354,530.00

B. Variable cost/unit Annual expenditure Baits (soap, palm fruit, small fishes, ant and 68,769.00 Partial fish processing 39,516.00 Miscellaneous costs (foods eaten while fishing, mending of nets, repairs of canoe e.t.c). 52,392.00 Total variable cost 160,677.23

C. Gross Margin (A-B) 193,852.77

D: Fixed cost: Depreciation value of equipments Canoe 1502.43 Nets 30,276.25 Hooks 168.57 Spears/fishing arrows 421.00 Paddle 40.00 Total fixed cost 32,408.25 Net returns (C-D) 161,444.52

Source; Field survey (2005).

However, the choice of the best functional form was based on the Model estimation and resource use efficiency statistical significance of the regression coefficients, the magnitude of the F-ratio, a well as their conformity to a prior expectation. The model estimation of artisanal fishing is presented in Table 2. The result shows that value of output of arti- RESULTS AND DISCUSSION sanal fishing was best estimated using the linear function, which explained 51.5% of the total variation in the values Gross margin analysis of artisanal fishing in the of output of artisanal fishers. However, the linear regres- study area sion functional form was chosen as the lead equation based on econometric and statistical reasons such as the A cost and returns analysis of cash flow of artisanal number of regression coefficients that are significant, the fishing in the study area is represented in Table 1. The value of R2 and the significant level of the F-ratio. Table posted total revenue of N 354, 530.00. It also The lead equation (Linear form) shows that values of showed that the total variable cost was N 160, 677.23. fixed cost invested (X1), depreciation value of fixed assets This involves cost for the purchase of baits, partial fish (X4) and area of the lake fished (X5) were significant while processing and some miscellaneous costs. The gross value of variable inputs, labour and value of other inputs margin realized was N 193.852.77. It was revealed that were not. All the significant variables (value of fixed cost, out of the total fixed cost of N 38, 408.25. The research depreciation and area of lake fished) and some variables revealed that nets were the most expensive single fixed that are not significant (value of variable inputs and value cost components. Its depreciation and replacement of other inputs) had positive relationship with the value of value was N 30, 276.25. Perhaps it may be as a result of outputs. This implies that as their quantities used the expensive nature of nets and the need to own increased, the revenue accruing to the artisanal fishes different types of nets for different fishing seasons and would increase. It shows that the revenue of artisanal different areas of water – rivers. However, the cash flow fishers would depend on the extent new fishing sites in gave a net return of N161, 444.52. This figure is encou- the lake basin are identified and utilized, considering the raging and plausible given the scale of fish output. constraints imposed by nature. It also indicates that the

Anene et al. 097

Table 2. Marginal physical production of artisanal fishers using three regression models.

Variables Linear Semi-log Cobb–Douglas Constant -140354.7 11.148 0.868 (102540.44) (0.318)*** (2.174) -05 Value of fixed cost invested (x1) 4.872 1.266E 0.794 (1.331)*** (0.000)*** (0.258)*** -17 -02 Value of variable inputs (x2) 0.146 8.061E -1.487E (0.598) (0.000) (0.173) -06 -02 Labour (x3) -9339.06 4.206E 5.048E (16543.62) (0.051) (0.111) -06 Depreciation value of fixed assets (x4) 1.971 5.206E 0.153 (0.990)* (0.000)* (0.122) -03 Area of lake fished(x5 3322.539 9.141E 0.409 (1741.27)* (0.005)* (0.218) -02 -02 Value of other inputs(x6) 1631.599 1.283E 7.504E (4237.882) (0.013) (0.097) R2 0.515*** 0.483*** 0.462 F-ratio 16.482*** 14.490*** 13.306***

*** Significant at 1% *Significant 10%, Figures in parenthesis are standard error.

Table 3. Marginal value products and units acquisition cost of inputs.

Inputs MVP MVP/MFC Unit acquisition (N)

Fixed cost invested (x1) 4.872 4.59 1.06

Value of variable inputs (x2) 0.146 0.138 106

Labour (man days) (x3) -9339.06 18.68 500.00

Depreciation value of fixed assets (x4) 1.971 1.859 1.06

Size of lake (ha) (x5) 33222.539 1.662 2000.00

Value of the inputs (x6) 1631.599 153.24 1.06

Source: Filed survey (2005).

the other inputs used had negative influence on the value used were more productive than other resources. of output, implying the more they were used, the less the The relative allocative efficiency of the artisanal fishers revenue that would accrue to the artisanal fishers. was based on the non-classical requirement that each The non-significance of value of variable inputs, labour factor be paid equal to its marginal value product (MVP). and value of other inputs may be attributed to the level of Based on this, the ratio of marginal factor cost to use. Most artisanal fishers use traps and cast nets marginal factor cost (unit acquisition cost) were corrupted instead of baited hooks. It is believed that encircling nets and the values were 4.59, 0.138, - 18.68, 1.859, have the tendency to catch fishes than baited hooks. 1.662.1539.24 for value of fixed cost invested value of variable inputs, labour, depreciation value of fixed assets, size of lake and value of other inputs respectively. Pre- Marginal productivities of inputs vious studies show that maximum or absolute allocative efficiency for a particular resource is confirmed if The results of the estimated production functions were efficiency ratio is equal to one. But if efficiency ratio is further used to compute the marginal productivities of the greater than one, it means that less than the profit inputs in Table 3. The computed marginal value products maximizing level of the input is in use. Also if efficiency (MPP) in the case are the marginal physical products ratio is less than one, it means that more than the profit (MPPs) since the outputs were measured in monetary maximizing level of that particular resource is in use terms (Mbanasor and Obioha, 2003). This implies that (Onyenweaku and Fabiyi, 1991; Mbanasor and Obioha, one unit increase in any of the inputs holding other con- 2003). But from the result obtained, it is evident that the stant, will change the monetary returns by value values of variable inputs and labour were less than one corresponding to the marginal value product of that input indicating that more than the profits maximizing level of

098 J. Dev. Agric. Econ.

Table 4. Elasticity of production.

Inputs Values

Fixed cost invested (x1) 0.825

Value of variable inputs (x2) 0.031

Labour (man days) (x3) -0.53

Depreciation value of fixed assets (x4) 0.169

Area of lake fished (ha) (x5) 0.367

Value of other inputs (x6) 0.043 Total 1.282

Table 5. Distribution of problems encountered by artisanal fishers.

Problems encountered Frequency % of total population High cost of fishing gears 100 100 Low water fluxes/irregular flood pulses 45 45 Vegetation cover 68 68 Obnoxious fishing methods 60 60 Bad weather (harmattan, dew, rainfall etc) 21 21 Oil spillage 55 55 Inadequate finance and credit facilities 38 38 Inadequate storage facility (poor electricity supply) 12 12

all the resources were employed by the artisanal fishers. This finding is in conformity with the assertion of This suggests that the resources were inefficiently allo- Mbanasor and Obioha (2003) that actual cases of in- cated and were utilized above their economic optimum creasing returns occur at relatively low levels of output levels. The result shows the need for the artisanal fishers that are characteristics of small scale farming and fishing. to reduce the use of these resources employed in order The implication of these results is that higher outputs are to improve efficiency. possible with an increase in the levels of aggregate input However, the results indicate that the value of fixed at the current level of technology. cost invested, depreciation value of fixed assets, size of lake and values of other inputs were greater than one indicating that less than their profit maximizing level of Problems of artisanal fishers the resources were employed by the artisanal fishers. Table 5 represents the problems encountered by This suggests that these resources were inefficiently artisanal fishers in Ogutal Local Government Area of Imo allocated and were under utilized below their economic state, Nigeria. The result shows that the entire fishers optimum levels. The result shows the need for the (100%) had problems of high cost of fishing gears while artisanal fishers to increase the use of these resources 68% encountered problems of in accessibility of fishing employed in order to improve efficiency. grounds as a result of the presence of vegetation

invasion of fishing grounds. Fishing grounds are located Elasticity of production in freshwater swamps forests which hinders navigation. The use of chemicals or other obnoxious methods The elasticity of production shows the change in output (Gamalin 20, dynamite) in fishing constituted a problem relative to a unit change in input (Mbanasor and Obioha, to 60% of the fishers. Other problems encountered by the 2003). For the linear function which was our lead fishers are outlined in Table 5. equation, the elasticity of production = bi x y . From the result in Table 4, the production elasticity for each of the CONCLUSION AND RECOMMENDATIONS resources is less than unity indicating that the relationship between these resources and value of output The gross margin analysis of artisanal fishing revealed is inelastic. Also the coefficient of returns to scale is net returns of N161, 444.52 indicating that artisanal fish- 1.282 indicating increasing returns to scale. This implies ing is a lucrative venture. The hypothesis tested on the that farmers were operating at the region of maximum independent variables that influenced value of outputs in technical efficiency, an irrational region of production. artisanal fishing using linear regression model the combined

Anene et al. 099

effects of all the variables explained 51.5% of t showed 5. The oil companies should pay commensurate that of all the variables hypothesized, only fixed cost compensation to fishers whose sources of income are invested was statistically significant at 1% level of adversely affected by oil spills in those aquatic systems probability (P ≤ 0.01), size of lake was statistically sig- where they fish. nificant at 10% level of probability (P ≤ 0.01). However, 6. Loan facilities should be made available to the fishers he variations in the value of output of artisanal fishers. especially through the agricultural cooperative and rural The result revealed that area of lake fished was more development banks, at a government subsidized interest productive than other resources. rates. This will encourage the fishers into harvesting Meanwhile, the result of the elasticity of production increased amount of fish. indicated that each of the resources was less than unity indicating that the relationship between these resources and value of output were inelastic. In view of wide range REFERENCES of problems encountered by artisanal fishers high cost of Coates D (2000), “Inland Fisheries and Enhancement Status, fishing gears (100%), irregular flood pulse, use of toxic Constraints and Prospects for Food Security In Kyoto conference chemicals like Gamalin 20 and dynamites, oil spillage outcome and abstracts of papers presented. www.fao.org/waicent/ were reported as being very serious problems. faoinfo/fishery/fisher.htm. Based on there findings of this study the following Federal Office of Statistics (FOS) (1999): Annual abstract of statistics: federal Republic of Nigeria, Abuja. recommendations have been put forward and are Mbanasor JA, Obioha LO (2003). “Resource productivity Under believed would help improve the efficiency of resources Fadamas Cropping System in Umuahia North Local Government used in artisanal fishing in the study area. Area of Abia State Nigeria”. Trop. Subtrop. Agric. 2: 81– 86. Nwadiaro CS (1989). Ichthyofauna of Oguta Lake, a Shallow Lake in South Eastern Nigeria. Arch. Hydrobiology In, Oguta the path to 1. Government at all levels should subsidize the cost of follow A Chronicle of Papers and Proceedings of the Oguta Seminar fishing gears and other inputs used in fishing. This will 1999, 463 – 475. help to address the problem of high cost of fishing gears. Oladunnui O (1996). “Technical Efficiency Differentials in Agricultural 2. It is believed that the irregular flood pulses originated Productions. Implications for Agricultural Development in Nigeria” JAR 19(1): 15-28. at the commissioning of Kanji dam. Consequently, the Olayinde SC (1976). Economic Survey of Nigeria. Aromolaran dam should be regulated to allow for higher inflow of Publishing Company Ltd, Ibandan pp.33 – 42. water downstream. Onyenweaku CE, Fabiyi Y (1991). Relative Efficiency of co-operative 3. There is need for legislation against all forms of and Individual Farmers in Imo State. AMSE Trans. 18: 4. obnoxious fishing methods such as the use of chemicals in fishing. There is need to emphasis that law enforcement agents must ensure the enforcement of such laws. 4. Industrial activities (especially exploration and production of oil) should be carried out in an environ- mentally friendly manner with a view of causing little or no damage to the aquatic resources and where damage it occurs it must be remediated as soon as possible and adequate compensation paid accordingly.